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F I S C A L I M P A C T R E P O R T
SPONSOR HLC
ORIGINAL DATE
LAST UPDATED
1-31-07
2-19-07 HB 419/HLCS
SHORT TITLE Northern New Mexico Summer Youth Employment SB
ANALYST Lucero
APPROPRIATION (dollars in thousands)
Appropriation
Recurring
or Non-Rec
Fund
Affected
FY07
FY08
$5,000.0
Recurring
General Fund
(Parenthesis ( ) Indicate Expenditure Decreases)
Relates to Relates to SB 294
Relates to Appropriation in the General Appropriation Act
ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT (dollars in thousands)
FY07
FY08
FY09 3 Year
Total Cost
Recurring
or Non-Rec
Fund
Affected
Total
$250.0 $250.0
$500.0 Recurring General
Fund
(Parenthesis ( ) Indicate Expenditure Decreases)
SOURCES OF INFORMATION
LFC Files
Responses Received From
Office of Workforce Training and Development (OWTD)
Children, Youth and Families Department (CYFD)
Youth Conservation Corps (YCC)
SUMMARY
Synopsis of Bill
House Labor and Human Resources Committee substitute for House Bill 419 appropriates five
million ($5,000,000) from the general fund to Office of Workforce Training and Development
for fiscal year 2007 and 2008 to fund a statewide summer youth employment pilot program. The
pilot shall be administered by the local boards established in accordance with the federal
Workforce Investment Act of 1998. There is an emergency clause attached to this bill.
pg_0002
House Bill 419/HLCS – Page
2
FISCAL IMPLICATIONS
The appropriation five million ($5,000,000) contained in this bill is a recurring expense to the
general fund. Any unexpended or unencumbered balance remaining at the end of fiscal year
2008 shall revert to the general fund. There is an emergency clause attached to this bill.
If enacted, the appropriation and the program would be administered by OWTD. This would
entail executing award agreements with the Local Area Boards as provided in the bill; processing
payment requests for funding under the programs; monitoring and overseeing the programs; and
ensuring that rules and regulations are adhered to in the administration of the program.
The amount of funding indicated as “additional fiscal impact" ($500,000) represents five percent
of the appropriation. This amount could be deducted from the appropriation amount or could be
appropriated above the current proposed $5.0 million appropriation. OWTD does not currently
have general fund supporting the administrative costs to administer a program of this magnitude.
A five percent administrative cost is considered the minimum amount required to administer the
program and report on its outcomes.
The proposed appropriation contained in this bill is related to the $2.5 million recommended in
the Governor’s Executive Budget Recommendation as part of the FY08 OWTD operating budget
for a year-round youth employment program. The recommended appropriation is one of the
Governor’s initiatives for OWTD during Fiscal Year 2008.
SIGNIFICANT ISSUES
As reported by the United States Department of Labor (USDOL) August 25, 2006, the youth
labor force of 16-24 olds working or actively looking for work grows sharply between April and
July of each year. During these months, large numbers of youth take or search for summer jobs
and many graduates enter the labor market to look for or begin permanent employment. This
past summer the youth labor force grew by 3.2 million to a total of 24.7 million in July. In July
2006, 2.8 million youth were unemployed. The youth unemployment rate (11.2%) was about the
same in July 2005. These numbers support the need for additional youth employment
opportunities.
This information, compounded by future labor market trends, provide strong indications for the
need to expose and prepare the youth of New Mexico to the world of work and career-oriented
employment through the provision of work experience employment activity training and
services. OWTD supports the proposed bill to provide summer employment opportunities to the
youth of Northern New Mexico.
The federal Office of Juvenile Justice and Delinquency Prevention (OJJDP) has identified
“alternative activities,’ notably including summer and after-school employment opportunities for
older youth, as a key strategy for preventing and dissociating gang involvement and for reducing
youth-involved property crime.
PERFORMANCE IMPLICATIONS
Enacting the proposed legislation will substantially increase the number of youth employed in
the summer months. Passage of this bill would increase the need to monitor the successful
completion of the work assignments and the quality of the assigned work sites.
pg_0003
House Bill 419/HLCS – Page
3
ADMINISTRATIVE IMPLICATIONS
Although not specified, it is anticipated that OWTD would retain up to five percent of the
appropriation for administrative costs to support the activities associated with administering the
program, including fiscal administration and compliance monitoring.
Administratively, OWTD would be required to develop new rules to comply with the proposed
legislation. The new rules would mirror existing rules addressing youth employment, but they
will apply only to the “Summer Youth Employment Program".
CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP
This bill is related to SB 294.
TECHNICAL ISSUES
If enacted, the appropriation and the program would mark the first time that the WIA Local Area
Boards would be administering a non-WIA program. However, it is not beyond the capabilities
of the Local Area Boards to administer State programs, although the Local Board accounting
practices would be required to accommodate fund tracking for the State appropriations separate
from that of the WIA funds currently administered by the Boards.
OTHER SUBSTANTIVE ISSUES
The House Labor Committee Substitute for House Bill 419 provides $5,000,000 for a Summer
Youth Employment Initiative that started in FY06/07 at the request of Governor Richardson. At
that time the Youth Conservation Corps (YCC) program provided $131,457 towards the Summer
Youth Employment Initiative and employed 27 individuals. Four projects were located at Heron
Lake State Park, Coyote Creek State Park, Sugarite Canyon State Park and Storrie Lake State
Park. The non-profit Rocky Mountain Youth Corps (RMYC) sponsored two projects employing
20 individuals with projects at Wagon Mound and Springer. Funding for RMYC’s projects came
from OWTD and New Mexico Commission on Community Volunteerism (NMCCV). OWTD
transferred $50,000 to NMCCV and NMCCV then added $25,000.
The Youth Conservation Corps (YCC) provides statewide jobs to New Mexico youth between
the ages of 14 to 25. In the program year just completed, YCC employed over 700 youth in 35
projects; at least 3/4 of these youth were employed through the summer months. The YCC Act
requires that the projects be of lasting value and are designed to improve New Mexico’s natural,
historical, and cultural resources. Local citizens recognized the contributions made by these
youth to the overall health and well being of their community. Nothing can replace the feelings
of pride generated in these youth by being recognized in their community for a job well done.
ALTERNATIVES
YCC has an overhead cost of 5-8% and is an effective and efficient youth employment program.
The program was implemented in 1992 and is an established model for youth employment in
New Mexico. The OWTD could partner with YCC or use the YCC model to distribute the funds.
pg_0004
House Bill 419/HLCS – Page
4
WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL
Summer employment opportunities for the youth of New Mexico will continue to be limited to
existing summer jobs.
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